Federal foreign tax credits.
mrwa11eye1
New Member

Federal foreign tax credits.

Foreign taxes for pension, US interest, US capital gains (personal use property) was $5600 to be paid.  Would this be the number I put on line 1 of T2209 - non business income tax paid to a foreign country?  Or does it have to be broken down somehow depending on the type of income being taxed??

I also read somewhere that non business foreign taxes not recovered as a tax credit can be deducted from line 232 on the T1.  I remember it also said that anything in box 20(11) and 20 (12) can also be claimed on this line.  Do you have any knowledge of this?

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TurboTaxLise
Moderator

Investors and rental owners

Pension, interest, and capital gains, these are all separate entities. You may have Tslips for these as well and if that is the case, you will find them under the Income tab - Tslips. 

If your personal use property in the US is valued at over $100,000, you will need to fill out a T1135 form which can be found in the Income tab drop down to Other Income Sources and you will see the T1135.

You may be eligible for a tax credit and the software is designed to calculate and optimize any credits or deductions that need to be made, but only if you are correctly entering the amounts.

Below, is a link that will help you understand your foreign sources reporting so you are correctly compensated.

How do I report foreign income, pension, and other foreign amounts?

https://turbotax.community.intuit.ca/replies/2647976

For more information from TurboTax Tips : 

Using the United States-Canada Income Tax Treaty to Reduce Double Taxation

https://turbotax.intuit.ca/tips/using-the-united-states-canada-income-tax-treaty-to-reduce-double-ta...

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mrwa11eye1
New Member

Investors and rental owners

Thanks .. Taxes were deducted on the pension, not on the interest income or the sale of the home.  I do my US return and end up with a US tax bill of $5600.  What I was asking was .. how do I report to get credit for these taxes.  Would the $5600 be the number I put on line 1 of T2209 - non business income tax paid to a foreign country? and then figure out the credit from there?

I don't believe T1135 needs to be filled in for personal use property.
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TurboTaxLise
Moderator

Investors and rental owners

@mrwa11eye  - In the find icon at the top right of your screen once in your tax return, type in "foreign tax credit" the form will come up.
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mrwa11eye1
New Member

Investors and rental owners

Thanks, so I would need to prorate the taxes for each T5 slip ... ? for foreign source income.  There were taxes witheld on the foreign pension ... should I enter the taxes withheld or the taxes actually on that income since I am prorating everything out?
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TurboTaxLise
Moderator

Investors and rental owners

You must report the actual taxes paid on that income.

Below is a link from TurboTax Tips for more information: ( I will add this to the original answer as well)

Using the United States-Canada Income Tax Treaty to Reduce Double Taxation
https://turbotax.intuit.ca/tips/using-the-united-states-canada-income-tax-treaty-to-reduce-double-ta...

Also, ensure that all amounts claimed are in CDN$ based on the exchange rate at the time it was paid.
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